Monday, February 28, 2011

2010 Berkshire Shareholder Letter: "Trigger Finger is Itchy" for Major Acquisitions

Warren Buffett wrote the following in the latest Berkshire Hathaway (BRKashareholder letter:

We will need both good performance from our current businesses and more major acquisitions. We're prepared. Our elephant gun has been reloaded, and my trigger finger is itchy.

Berkshire has roughly $ 38 billion in cash so there's plenty to put to productive use. The Federal Reserve has, of course, frozen dividend levels at major banks (strong or weak) during the last two years. In the letter, Buffett had the following to say about Wells Fargo's (WFC) dividend:

At some point, probably soon, the Fed's restrictions will cease. Wells Fargo can then reinstate the rational dividend policy that its owners deserve. At that time, we would expect our annual dividends from just this one security to increase by several hundreds of millions of dollars annually."

He expects a boost in dividends from many of Berkshire's stock holdings with Wells Fargo being the largest.

I'll have a more follow up posts early next week on what is an excellent letter. Buffett has written his fair share of quality stuff over the years but this letter might be the best one yet.

Adam

Long BRKb and WFC
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